Choice CEO Steve Joyce Talks Tech

Choice Hotels CEO Steve Joyce’s career in the lodging industry spans over three decades, and he has a proven track record of developing and growing some of the best-known hotel brands in markets worldwide. With the launch of SkyTouch last year and introduction of verified reviews to Choice’s website, Joyce has recently added the title of tech mogul to his resume. Here’s what he had to say about the company’s latest news.

Why does the lodging industry lag so far behind others when it comes to technology?
Historically, our business hasn’t been driven by technology. It was more important to have a remote control and a phone, for instance, than faster WiFi and more power outlets. The industry has been a reluctant investor in technology, and it has been forced by outside threats to start paying attention. And we are even slow to adopt new opportunities that save money.

There’s no doubt this is where the industry needs to go. And as other new technologies are proven, hotels need to move faster to adopt them. Look at HomeAway…well, we do that already. All credit to them because they did it in a different fashion first and were able to create a lot of value for themselves. So why didn’t we think of that?

We have tended to think of ourselves as pure lodging players and the reality is that this isn’t the case anymore. We’re in a technology distribution environment that is fraught with opportunity and peril. And there are potential new businesses that come from what we do that are popping up all over. In the case of Airbnb and HomeAway, we didn’t identify the segment, and we didn’t go after it. So we need to be more cognizant of emerging trends.

How does this relate to SkyTouch?
When it comes to SkyTouch, people ask whether it will save them money and the answer is that the software is just a fragment of the whole solution. It isn’t a cheaper box—there’s no box at all. There’s no need to have a server sitting on your property, so you can do the computing at a fraction of the cost.

Back in 2000, our former CIO built this as the first Internet-based property management system almost as a skunkworks project. Now, it wasn’t very reliable back then, which was a problem. In 2008, we stabilized it and added to the functionality. At the same time, the cloud-based revolution began, and we were able to easily move the whole operation to the cloud. At some point, another company will develop its own software-as-a-service [SaaS] solution, but until then we have a head start. We’re going to continue investing in this platform too. This is a $35 million business, and we don’t have to add too many more customers to start making some money.

Is there a bit of a Catch-22 with SkyTouch because you own it, but in order to get a bigger adoption rate, it needs to be on its own?
We understand that if you’re another brand, you don’t want to buy from Choice. But SkyTouch is in a different building, operating under its own auspices with its own CEO. There is no connection between any Choice systems folks and that entity—there is a firewall between customer data. This is an independent company owned by Choice. But we’re operating under no illusions that SkyTouch will be part of Choice long term.

Between Choice’s recent launch of reviews on choicehotels.com that are verified where TripAdvisor’s are not, and the stance you took with Expedia in 2009, you have a history of going it alone regarding larger industry issues. Wouldn’t it help to enlist the aid of others?
We obviously have philosophical discussions with others. But this situation is different than it was with Expedia. We are going to be a major partner with TripAdvisor. They are moving into the booking space, and we think they can be an incremental value-add to us. So we play with them today, and we expect to have a relationship with them going forward.

In the case of Expedia, I felt they weren’t working with us as partners and asking us for things that we were not going to give. In this case, there’s common ground for us to work with TripAdvisor. We feel strongly that what is relevant to our consumers are other verified reviews from our consumers. TripAdvisor is the number one site out there, and we’re under no illusions that people aren’t going to look at TripAdvisor too. But we think that providing verified reviews provides our consumers with independent feedback, and it provides our franchisees with an ability to immediately deal with that feedback. This approach keeps it between us and the consumer without having a third party involved. However, we fully expect our consumers to do both.